Student Loan Forgiveness For Disabled Parents

Student Loan Forgiveness For Disabled Parents

The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the process of applying for forgiveness of Paycheck Protection Program loans, along with newly updated and revised forms to meet the requirements of the latest stimulus legislation. 

Congress approved the COVID-19 relief package in the month of March and included $284 billion of financing to small businesses in need of loans. The funds were used to mitigate the economic effects of the coronavirus outbreak. It included a requirement for the SBA to issue simplified forms within the first 24 hours of the legislation being adopted to make the application process for forgiveness, along with conditions designed to facilitate more bank loans by community banks, specifically for minority-owned businesses who had trouble getting loans last year.

Student Loan Forgiveness For Disabled Parents

“The Small Business Administration met the requirement to issue the single-page form for loan forgiveness under the PPP within 24 days of the date of enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released updated forms.”

Terms for forgiveness for the first draw of PPP loans

Student Loan Forgiveness For Disabled Parents – First Draw PPP loans granted to borrowers who meet the criteria are eligible for full loan forgiveness if within the 8-to 24-week period after loan disbursement:

  • The same goes for the compensation and employees.
  • The proceeds of the loan can be used to cover payroll costs or other expenses that are eligible.
  • A minimum of 60% of the proceeds go to the cost of payroll

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans to eligible customers are qualified for loan forgiveness if the loan is paid within an 8to 24-week time frame.

  • Employee and compensation levels are kept in the same way as required for the First Draw PPP loan
  • The loan funds are used on payroll and other eligible expenses; and
  • At least 60% of profits are spent on payroll costs
  • How do I apply for loan forgiveness , and when

When all of the loan’s proceeds have been used, a borrower can apply to be granted forgiveness. Borrowers may apply for forgiveness at any time until the date at which the loan matures. If borrowers do not apply for forgiveness within 10 years of the last day of the covered period, then PPP loan payments can no longer deferred, and borrowers must make payment to their PPP lender.

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